Correlation Between Wonil Special and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Wonil Special and BGF Retail at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wonil Special and BGF Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonil Special Steel and BGF Retail Co, you can compare the effects of market volatilities on Wonil Special and BGF Retail and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wonil Special with a short position of BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and BGF Retail.
Diversification Opportunities for Wonil Special and BGF Retail
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wonil and BGF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail and Wonil Special is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wonil Special Steel are associated (or correlated) with BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Wonil Special i.e., Wonil Special and BGF Retail go up and down completely randomly.
Pair Corralation between Wonil Special and BGF Retail
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.54 times more return on investment than BGF Retail. However, Wonil Special Steel is 1.85 times less risky than BGF Retail. It trades about 0.06 of its potential returns per unit of risk. BGF Retail Co is currently generating about -0.15 per unit of risk. If you would invest 719,000 in Wonil Special Steel on September 3, 2024 and sell it today you would earn a total of 9,000 from holding Wonil Special Steel or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. BGF Retail Co
Performance |
| Timeline |
| Wonil Special Steel |
| BGF Retail |
Wonil Special and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and BGF Retail
The main advantage of trading using opposite Wonil Special and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, BGF Retail can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BGF Retail will offset losses from the drop in BGF Retail's long position.| Wonil Special vs. Samwha Electronics Co | Wonil Special vs. KyungIn Electronics Co | Wonil Special vs. Daou Technology | Wonil Special vs. Cuckoo Electronics Co |
| BGF Retail vs. LG Display | BGF Retail vs. Hyundai Motor | BGF Retail vs. Hyundai Motor Co | BGF Retail vs. Hyundai Motor Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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